Companies Find Bigger Returns In Smaller Spaces

Opening many small stores is a strategy that seems to be working for big retailers.

To Neng Yang, the Best Buy box store in Independence is just too overwhelming, so much so that she only shops there once a year, at the holidays.

So when she needed a new cellphone, she bypassed the 55,000-square-foot store with its many departments — appliances, big-screen TVs, computers, cameras, car audio, video and music. Instead, she stopped across the street at the Best Buy Mobile store.

The slimmed-down 850-square-foot sister store, in Independence Center, concentrates only on mobile devices.

“I ask about a thousand questions, and this is more personalized, more one-on-one attention,” said Yang, of Blue Springs.

Yang bought a white Droid Razr, and her brother, John Yang, picked up a black one.

Bigger is not always better. Just ask the biggest retailers in the country — and their customers.

The recession and the growth of online shopping have conspired to cut chains down to size. One strategy they’ve employed has been to close underperforming stores. But Best Buy and an increasing number of companies are trying another strategy, too — going smaller.

Among the retailers testing smaller concepts are Blockbuster, Ann Taylor, the Gap, Kohl’s, Lowe’s and Sports Authority. RadioShack is trying a “store within a store” format in several OfficeMax stores in California.

Walmart is already in the process of opening new smaller stores. Their plan calls for opening hundreds of new stores over the next three years.
Wal-Mart Stores Inc., the world’s largest retailer, will ramp up development of smaller stores as it looks to jump-start sales in the U.S.The retailer plans to add “hundreds” of smaller-format stores over the next three years, U.S. Chief Bill Simon said at an investor conference in New York today. Wal-Mart is considering acquisitions that could add to that growth, Simon said, declining to name specific targets.

Chief Executive Officer Mike Duke is seeking to spur growth in the U.S. as comparable-store sales at Wal-Mart’s namesake locations have fallen for seven straight quarters. The retailer had said it planned to open 30 to 40 smaller units this year in rural and urban areas and that there were “thousands” of potential sites in the U.S.

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